All this should be clear to consumers by Jan. 1, 1998, when the Food and Drug Administration's new dairy labeling rules go into effect. The milk industry isn't waiting, though, because it sees the label changes as a great marketing opportunity--particularly when it comes to skim milk. So you may see the new labels a whole lot sooner.

Current milk labeling is confusing because it's inconsistent: There's vitamin D (or homogenized), 2 percent, 1 percent and skim. Vitamin D is "whole milk," or full-fat milk. It has about 4 percent fat by volume. Two percent milk has half the fat of whole milk, not 2 percent of the fat, as many people think. One percent, then, has half the fat of 2 percent, and skim milk has no fat at all.

Until now, dairy products have been exempt from the Nutrition Facts labeling that the FDA introduced in 1990. That's because, among other reasons, the dairy industry wanted to continue to call 2 percent milk "low fat," even though it gets 35 percent of its calories from fat and has 5 grams of fat per 1-cup serving. The 1990 rules say that "low fat" can only apply to foods with 3 or fewer grams of fat per serving.

"Industry studies have found that many consumers mistakenly believe that `skim' means skimmed of nutrients, not fat," Ruland says. (In fact, skim milk has all the nutrients of full-fat milk.)

So the new laws permit skim milk to be called "fat-free" or "non-fat."

Similarly, the milk that has been known as 1 percent, and contains about 3 grams of fat per 1-cup serving (2 grams of which are saturated), will be allowed to use "light." That term has been widely used on other foods that show at least a 50 percent reduction in total fat, as compared to a "full-flavored" version.

Milk that has been called 2 percent may be called "reduced fat," but not "low fat" because it isn't, according to FDA guidelines.

The labeling for whole milk will remain unchanged.

Whole milk usually has 8 grams of fat per cup, 5 grams of which are saturated, and gets about half its calories from fat. The USDA recommends that most people should get no more than 30 percent of their daily calories from fat.

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